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dougos4353
New Member

Is depreciation on a rental property taxed at my tax rate or is it taxed as a separate item when the property is sold?

 
2 Replies
SweetieJean
Level 15

Is depreciation on a rental property taxed at my tax rate or is it taxed as a separate item when the property is sold?

Depreciation recapture is the portion of the gain attributable to the depreciation deductions previously allowed during the period the taxpayer owned the property. The deprecation recapture rate on this portion of the gain is 25%.

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Critter
Level 15

Is depreciation on a rental property taxed at my tax rate or is it taxed as a separate item when the property is sold?

The depreciation recapture is taxed at your normal rate but capped at no more than 25%.

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